Planning board approves N. Bethesda project

Mixed-use project follows earlier site plans

Real estate investment trust Saul Centers of Bethesda has purchased Metro Pike Center in Rockville for $33.25 million, with the assumption of a $16 million loan on the property, according to information from the seller, the Holliday Corp. of Washington, D.C. The 63,886-square-foot neighborhood retail center is near the White Flint Metro station and White Flint Mall in North Bethesda. The property is 87 percent leased to tenants including FedEx Kinko's, David's Bridal, Verizon, Domino's Pizza and McDonald's.

Spring is here, the snow has melted, the geese are honking and developers are flocking back to feather projects that lay dormant during the winter of recession.

Or so it appears, as the latest and one of the most ambitious proposals approved Thursday by the Montgomery County Planning Board would allow a 1.2 million-square-foot mixed-use complex to be built in the Rock Spring Centre opposite Walter Johnson High School in North Bethesda.

The action revives prospects for DRI Development of Washington, D.C., to embark on a massive build-out of the site, where a number of earlier plans featured luxury apartment or condominium towers, retail and office space and a spa resort.

"The economy was just a double whammy on this project," said Steven A. Robins of Lerch, Early & Brewer, who represented DRI before the planning board.

As of now, the preliminary plan amendment sought by DRI would make only marginal differences to the total square footage already approved for earlier developers, by adding 10,000 square feet of office space and removing 10,000 square feet of retail.

The plan, first floated by DRI in 2008, has been stalled by the financial industry collapse. But the developer is eager to move forward now that demand has picked up for commercial real estate.

"We're under a very, very tight time frame for getting started on this project," said Robins, citing an adequate public facilities approval that runs out in 2013.

He said DRI will have to work fast to line up building permits even if the County Council approves a bill to grant an automatic two-year extension for projects that already have approval for preliminary plans and public facilities.

Juggling county approvals, rocky relations with the site's owners and the economy proved too much for The Penrose Group, which had planned to build residential and office towers, a 157-room hotel and a 90,000-square-foot "wellness center" and spa. The plan collapsed with the economy and even a scaled-back proposal for two apartment buildings stalled.

If the DRI project comes to fruition, it will fulfill the original vision county planners had for Rock Spring Centre in the 1990s, when development plans were first approved for the 50.5-acre site owned by the Davis and Camalier families.

The property, which is part of a corporate office center covering 247 acres between Old Georgetown Road and the Interstate 270 spurs near their junction with the Capital Beltway, already includes a 386-unit apartment complex in six four-story buildings developed by Avalon Bay.

The DRI plan for the remaining 30 acres would transform the skyline. Although the new plan calls for low-scale six-story residential buildings, the two office towers would be visible for miles, reaching 17 and 20 stories tall.

The project would create an urban zone in an area that is now a mix of suburban tract homes and offices surrounded by a thick belt of trees. Office, hotel and retail space would be linked by a plaza featuring three retail pavilions, movie theaters and entertainment facilities targeting tots, teens, adults and seniors.

Cost estimates for the DRI project were not available Thursday, but the DRI project is every bit as big as the original Penrose project, which had an estimated completion cost of about $1 billion.

Council considers approval extensions

The Montgomery County Council plans a public hearing March 1 to consider an across-the-board extension of development approvals in an effort to help projects stalled by the Great Recession.

Developers would have a two-year automatic extension of all previously granted preliminary plan and adequate public facilities approvals that remain valid as of April 1, under a bill introduced last month by council president Valerie Ervin (D-Dist. 5) of Silver Spring. The measure also would continue the extension of public facilities approvals from five years to seven years and preliminary plan approvals from three years to five years, as passed in 2009.

County planners recommended passing the bill, "given the difficulty of obtaining financing coupled with the market slowdown."

Unless the bill passes, county officials will need to consider approval extension requests on an ad hoc basis, putting major developments at risk.

That was the case when the Planning Board approved an adequate public facilities extension on Feb. 3 that will allow the private Financial Industry Regulatory Authority to expand in Rockville.

The securities agency standards group wants to consolidate office space there by possibly moving 420 workers out of Washington, D.C., to the Decoverly Office Park, where it wants to construct a third building of 105,000 square feet. A building permit for the project expired in 2009 but the site's new owner, DRA CRT Acquisition Corp. of New York, struck a deal for FINRA to buy a third building. The group already has 1,500 workers there.

The planning board granted the request, which will set a new six-year clock on the public facilities approval.